Published December 6, 2025
Solstice Advanced Materials, Inc. (NASDAQ: SOLS) has been public for barely six weeks, but the Honeywell spin‑off already sits at the intersection of some of the market’s biggest themes: AI data centers, nuclear energy, and the global transition to low‑carbon cooling.
The stock closed Friday at $47.13, valuing the company at about $7.5 billion and implying a trailing P/E of roughly 23x on $2.07 of earnings per share and about $3.8 billion in trailing twelve‑month revenue. [1]
At the same time, Solstice is being shuffled out of the S&P 500 just weeks after joining, and analysts are rapidly updating their targets after the company’s first earnings report as a standalone public business. [2]
Solstice Advanced Materials stock today
As of the close on December 5, 2025:
- Share price: $47.13
- Day’s range: $46.59 – $47.95
- 52‑week range: $40.43 – $61.00 (essentially the post‑spin range so far)
- Market cap: $7.48 billion
- TTM revenue: $3.81 billion
- TTM net income: $329 million
- TTM EPS: $2.07
- TTM P/E: 22.7x
- Forward P/E (based on consensus 2025 EPS): ~18x
- Dividend: none at present [3]
Trading volume remains elevated for a new listing (around 2.2 million shares on Friday), reflecting heavy activity from index funds and spin‑off arbitrage investors. [4]
From Honeywell division to standalone specialty materials company
Solstice was created when Honeywell International (HON) spun off its Advanced Materials business. The separation was completed on October 30, 2025, and Solstice began trading on the Nasdaq the same day under the ticker SOLS. [5]
Key points from the spin‑off structure:
- Honeywell shareholders of record on October 17 received one SOLS share for every four HON shares. [6]
- The business brought roughly $3.8 billion in 2024 sales and about $1 billion of EBITDA into the new company, with historical growth of about 4–5% per year. [7]
- Solstice launches with about 4,000 employees, 24 manufacturing sites, and four R&D centers, serving more than 3,000 customers in 120+ countries. [8]
Initially, Solstice was added to both the S&P 500 (replacing CarMax) and the Nasdaq‑100, giving it instant visibility and automatic demand from index funds. [9]
However:
- On November 6, S&P Dow Jones Indices removed Solstice from the Nasdaq‑100. [10]
- On December 5, S&P announced that CRH, Carvana, and Comfort Systems will join the S&P 500 on December 22, replacing LKQ, Solstice, and Mohawk Industries, which will all move to the S&P SmallCap 600. [11]
This kind of index reshuffling can create short‑term selling pressure as large passive funds rotate out of SOLS, even though the underlying business hasn’t changed.
What Solstice actually sells: cooling, chips, and nuclear fuel
Operationally, Solstice is a specialty materials company with two reportable segments: [12]
- Refrigerants & Applied Solutions (RAS)
- Low global‑warming‑potential (LGWP) refrigerants for cars, buildings, and industrial systems (Solstice®, Genetron® brands).
- Blowing agents, solvents, and aerosol propellants.
- Healthcare packaging films (Aclar®).
- An Alternative Energy Services (AES) business that converts uranium into uranium hexafluoride (UF₆), a key step before enrichment for nuclear fuel.
- Electronic & Specialty Materials (ESM)
- Electronic materials used in semiconductor manufacturing and data‑center thermal management.
- High‑strength protective fibers and specialty materials for defense and safety.
- High‑purity lab chemistry brands like Fluka™ and Hydranal™.
Barron’s and Solstice management have highlighted two particularly marketable angles: [13]
- Its refrigerants and semiconductor materials are tied directly to AI data‑center build‑out and high‑performance computing.
- Through its AES business and the Metropolis Works facility, Solstice is effectively the only U.S. provider of uranium hexafluoride conversion, with capacity essentially sold out through 2030, tapping the global push for more nuclear power.
At Solstice’s Investor Day and in coverage by Chemical & Engineering News, management emphasized that hydrofluoroolefin (HFO) refrigerants — Solstice’s flagship low‑GWP chemistry — have grown from about 27% of Honeywell’s refrigerant sales in 2022 to more than 60% by this year, with market research suggesting ~9% annual HFO growth in North America and ~8% in Europe through the end of the decade. [14]
Q3 2025 results: strong sales, spin‑off friction in the P&L
Solstice’s first reported quarter as a soon‑to‑be independent company (Q3 2025, while still under Honeywell) gives a cleaner snapshot of how the business performs.
For Q3 2025 (three months ended September 30): [15]
- Net sales: $969 million, up 7% year‑on‑year (YoY).
- Net income / loss:–$35 million, versus +$152 million a year earlier.
- Adjusted standalone EBITDA: $235 million, down 5% YoY.
- Adjusted EBITDA margin:24.3%, down 290 bps from 27.1%.
The headline net loss was driven by:
- $182 million of income tax expense, including “frictional” taxes tied to the Honeywell separation.
- Higher corporate overhead as Solstice builds standalone capabilities in finance, IT, and other support functions.
Segment breakdown
Refrigerants & Applied Solutions (RAS) – the profit engine [16]
- Net sales: $687 million, up 9% YoY.
- Refrigerants revenue jumped 22%, reflecting strong demand and favorable pricing.
- Healthcare Packaging revenue fell 14% on lower volumes.
- Alternative Energy Services revenue was roughly flat, but AES backlog grew 12% sequentially to $2.2 billion, underscoring long‑term nuclear and energy‑transition demand.
- RAS adjusted EBITDA fell 3% and margin compressed from 39.7% to 35.4% due to less favorable product mix in stationary refrigerants and the ongoing transition to lower‑GWP products.
Electronic & Specialty Materials (ESM) – smaller, more cyclical [17]
- Net sales: $282 million, up 2% YoY.
- Electronic Materials grew 4%; Safety & Defense Solutions grew 6%, helped by higher volumes and FX tailwinds.
- Research & Performance Chemicals declined 2% on weaker volumes.
- ESM adjusted EBITDA fell 15%, with margin down from 19.9% to 16.7%, pressured by what management described as “transitory cost items.”
Balance sheet and guidance
After the spin‑off transactions:
- Total long‑term debt: about $2.0 billion.
- Cash & equivalents: roughly $450 million.
- Net leverage: ~1.5x trailing adjusted EBITDA.
- Total liquidity: around $1.5 billion, including a $1.0 billion revolving credit facility. [18]
Full‑year 2025 guidance (reaffirmed): [19]
- Net sales: $3.75–3.85 billion.
- Adjusted standalone EBITDA margin: ~25%.
- Capital expenditures: $365–415 million.
The capex step‑up (already $248 million through nine months, up 23% YoY) is mainly aimed at capacity expansions like the Spokane semiconductor project.
New Spokane fab‑materials expansion: a $200 million semiconductor bet
On December 2, Solstice announced it had broken ground on a $200 million expansion in Spokane, Washington, focused on materials for advanced semiconductor manufacturing. [20]
According to the company:
- The project will add over 110,000 square feet of production and R&D space by 2029.
- It is expected to double Solstice’s capacity for certain high‑purity materials used in chip fabrication.
- The expansion should create more than 80 new high‑skilled jobs in the region and shorten lead times for semiconductor customers by about 25% once fully ramped.
- The facility is designed with circularity in mind, including increased recovery and recycling of high‑value metals and reduced greenhouse gas emissions compared with existing processes.
Management explicitly framed the project as a response to AI and high‑performance computing demand, which is driving a wave of new fabs and retrofits globally. [21]
Wall Street’s view: early consensus “Buy” with wide targets
Most major sell‑side firms have moved quickly to initiate coverage on Solstice. As of December 6, the publicly visible analyst landscape looks roughly like this:
- Consensus rating: overall “Buy”, based on three tracked analysts.
- Average 12‑month price target:$54, implying roughly 15% upside from the current price.
- Target range:$50–$58 on most mainstream screens. [22]
Drilling into individual calls:
- BMO Capital Markets – Outperform, $70 target
BMO’s John McNulty launched coverage around the spin‑off with an Outperform rating and a $70 price target, calling Solstice a “high‑quality, stable growth company” and a “welcome addition” to the chemical and materials sector. He argues the portfolio, largely unified by fluorine‑based technologies, offers steady secular growth backed by regulation and structural demand for better cooling and energy efficiency. Risks include HVAC cyclicality, patent expirations on key HFO molecules, and limited M&A experience as a stand‑alone entity. [23] - UBS – Buy, target cut to $58 (from $62)
On November 25, UBS trimmed its target to $58 from $62 but maintained a Buy rating. UBS still sees “significant upside” from the current share price and highlights high investor interest, but wants a clearer catalyst path, including formal 2026 guidance from management. [24] - Alembic Global Advisors – Overweight, $60 target
Alembic Global initiated coverage with an Overweight rating and a $60 target, underscoring Solstice’s exposure to AI, semiconductors, and nuclear fuel as differentiated growth vectors in the materials space. [25] - RBC Capital Markets – Sector Perform, $50 target
RBC started at Sector Perform with a $50 target, effectively a neutral stance. RBC cited:- Expectations for mid‑single‑digit sales growth and roughly 6% EPS CAGR through 2026.
- Low operating leverage, which limits earnings acceleration even as revenue grows.
- Valuation near what it considers fair value, around 8–8.5x 2026E EBITDA versus its 9x target multiple. [26]
- Mizuho – Neutral, $54 target
Mizuho (as referenced in RBC’s note) initiated coverage with a Neutral rating and a $54 target, describing Solstice as a leading fluorochemicals producer with low leverage and relatively limited exposure to legacy PFAS liabilities. [27]
In addition, S&P Global Ratings has assigned Solstice a ‘BB+’ issuer credit rating, reflecting a sub‑investment‑grade but solid balance sheet for a newly separated industrial, supported by moderate leverage and resilient end markets. [28]
Cramer and the “nuclear angle”
Media attention around Solstice has been unusually intense for a fresh spin‑off.
On CNBC, Jim Cramer has talked about Solstice multiple times, most recently highlighting it as: [29]
- A “cheap stock” relative to its nuclear and AI exposure.
- A way to play nuclear power without owning a reactor operator, thanks to Solstice’s uranium hexafluoride conversion business, which he noted is the only one of its kind in the U.S.
- A company with a backlog up about 12% quarter‑over‑quarter in its alternative energy/nuclear services, offering what he called “a direct way to make money on nuclear energy.”
Cramer also warned that timing matters: he argued that Solstice could be more attractive after more interest‑rate cuts, given its industrial cyclicality, and that early volatility is normal with spin‑offs and index reshuffles. [30]
Index changes: what moving to the S&P SmallCap 600 could mean
Index membership has already been a major driver of trading flows:
- Late October:
- Early November:
- Solstice removed from the Nasdaq‑100 on November 6, triggering a roughly 9% pullback as fast‑money and index‑linked investors sold. [33]
- December 22 (upcoming):
- CRH, Carvana, Comfort Systems will join the S&P 500.
- Solstice, LKQ, and Mohawk Industries will move to the S&P SmallCap 600, as part of S&P’s quarterly rebalance. [34]
For SOLS, the net effect is:
- Short‑term technical headwinds as S&P 500 index funds sell and small‑cap index funds buy, typically around the effective date.
- Potentially higher volatility and a different shareholder base tilted more toward small‑cap specialists rather than mega‑funds benchmarked to the S&P 500.
Long‑term, index labels matter far less than whether Solstice delivers on its growth and margin targets, but in the near term these flows can overshadow fundamentals.
Key opportunities for Solstice stock
1. Structural HFO refrigerant growth
Regulatory mandates in the U.S., Europe, and other markets are forcing a shift from older, high‑GWP refrigerants to HFOs and other low‑GWP solutions. Solstice is one of the best‑positioned players in this niche, and industry data point to high‑single‑digit annual growth in HFO volumes through at least 2030 in key geographies. [35]
2. AI and data‑center build‑out
AI training clusters and dense cloud data centers need both advanced chips and aggressive cooling. Solstice sells:
- Chemicals used in semiconductor fabrication, such as high‑purity etchants and materials.
- Advanced refrigeration fluids and thermal‑management materials for data centers. [36]
The Spokane expansion is an explicit bet that this demand will stay strong for years.
3. Nuclear energy and uranium conversion
With governments revisiting nuclear as a reliable, carbon‑light baseload power source, Solstice’s uranium hexafluoride conversion business stands out. That operation is essentially booked out through 2030 and directly benefits from the push to power energy‑hungry AI data centers with nuclear plants. [37]
4. Spin‑off “unlock” potential
Barron’s and several analysts note that Solstice trades at around 9–10x trailing EBITDA, compared with an average of roughly 15x for established specialty‑chemicals peers, leaving room for multiple expansion if the company proves it can grow faster and more consistently than the sector. [38]
Main risks and pressure points
Despite the exciting themes, Solstice is not a simple growth story.
Patent cliffs and competition in refrigerants
Early composition‑of‑matter patents on key HFO molecules (like 1234yf) are starting to expire, raising the risk that more competitors enter the market. Solstice’s strategy has been to layer application patents and next‑generation products to extend its moat, with meaningful coverage at least through 2028 and some patents lasting into the 2040s — but commoditization risk is real. [39]
Margins under pressure
Q3 already showed margin compression in both RAS and ESM, driven by product‑mix shifts, transitory cost items, and higher standalone corporate overhead. If HFO markets become more commoditized or semiconductor demand softens, keeping EBITDA margins around the targeted 25% could become harder. [40]
Industrial cyclicality
Solstice sells into HVAC, automotive, consumer electronics, and industrial end markets — all of which can be sensitive to interest rates and macro growth. Cramer and some analysts have stressed that the company may be in a tough part of the cycle right as it comes public, which can amplify volatility. [41]
Execution as a new stand‑alone company
S&P’s BB+ rating and modest leverage give Solstice some balance‑sheet flexibility, but the company still needs to prove it can: [42]
- Run complex global operations without Honeywell’s corporate infrastructure.
- Deploy several hundred million dollars in annual capex effectively (Spokane and other projects).
- Manage nuclear and fluorochemical regulatory risk, including climate policy and environmental liabilities.
Solstice Advanced Materials stock forecast: what to watch into 2026
Putting all of this together, the market’s current view of SOLS stock looks something like this:
- Price around $47.
- Consensus 12‑month target around $54, with a range from $50 (RBC) to $70 (BMO) and a cluster in the high‑50s (UBS $58, Alembic $60). [43]
In simple terms, analysts are collectively:
- Bullish on the themes (AI, nuclear, regulatory cooling transition).
- Constructive on the balance sheet and cash‑flow profile.
- Split on valuation and execution risk, especially around margin durability and the pace of post‑spin offloading by legacy Honeywell shareholders.
For investors and traders watching SOLS over the next 12–18 months, the key catalysts and checkpoints are likely to be:
- 2025 year‑end results and 2026 guidance
- How aggressively management guides on revenue growth and EBITDA margin versus the current 25% target.
- Any updates on AES backlog and visibility beyond 2030.
- Progress on the Spokane semiconductor expansion
- Budget discipline on the $200 million project.
- Evidence that new capacity is contracted with high‑quality fab customers.
- Regulatory and policy developments
- HFO adoption timelines and possible new rules on refrigerants.
- Nuclear power policy and Western efforts to secure non‑Russian nuclear‑fuel supply chains.
- Index‑driven technicals around December 22
- How the stock trades as it exits the S&P 500 and enters the SmallCap 600. Clearing that technical overhang could set a cleaner stage for fundamentals in 2026. [44]
References
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